How To Trade The Stock Market In The Lower Time Frame

How To Trade The Stock Market In The Lower Time Frame

Investment business is always very challenging. Even after knowing everything about this market, you might have to lose money due to a lack of knowledge. But if you take the trades with strong confidence and focus on long-term goals, you should be able to secure your financial freedom. The rookies often complain that stock trading is boring as they have to trade in a higher time frame. But do you think the professional traders are always trading in higher time frames? The absolute answer is NO. Many professional traders are day trading the stock market by using the lower time frame. But they have extensive skills and experience which helps them to deal with the complexities of this market.

In this post, we will guide you to trade the stock market in a lower time frame. If you follow the steps mentioned in this article, you should be able to trade any major stocks in any time frame.

Selecting the stock

You have to very cautious about the stock selection process. If you take the trades in the exotic stock, you will never make a profit in the lower time frame. The professional stock trader only day trades the market when the trade signals are obvious in the major stocks. So, take your time and learn to evaluate the different stock prices. Pick the best tradeable asset based on the price movement. Avoid trading the stock which has no definite trend. If the price movement is a bit choppy, you should also avoid such stocks. Never become overconfident and trade the most volatile asset in the lower time frame as it is more like a suicide mission.

Finding the existing trend

The trend is your friend. If you want to trade in the lower time frame, you must have an excellent idea about the different phases of the trend. You should have the skills to identify the endpoint of the retracement and only then you may expect to ride the trend in the lower time frame. Stocks trading might seem an easy task but it is not. To learn the basics of the trend trading strategy, you may use a demo trading account. Once you become good at analyzing the demo account, you will become more confident with your trading actions, and thus taking the trades in a lower time frame will become easier.

Learn multiple time frame analysis

Studying the different time frame trade signals is one of the most critical parts to trade the lower time frame data. At times you will get confused by seeing different signals in different time frames. In such conditions, you should be giving priority to the higher time frame data signals only. And never take any trades when you are confused about the direction of the trend. Though learning about the key steps used in multiple time frame analysis is a bit challenging, you can practice things in the paper trading account. Make yourself comfortable before you start taking the trades in the real market.

Trade with discipline

You have to be extremely disciplined with your actions to trade in the lower time frame. If you break any rules, you have to pay heavily. Create fixed sets of rules to day trade the stock market. But do not make the rules overly complex as you will fail to follow them properly. At times you might become emotional and have the strong urge to break the rules. During such a moment, you should walk away from your trading platform and look for a long-term solution. Only then you can succeed as a professional trader. Never randomly take things.

Look for the logic behind the execution of each trade. And limit your risk factor by using the famous 2% rule of money management. If possible take a 1% risk in each trade and avoid overtrading the market. Last but not the least, never stop learning in the stock trading business.

About the author: Jill T Frey

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